The cost of hiring a bad employee

Competition for jobs is greater than ever, so you'd be forgiven for thinking that employers have it easy when looking to fill a new vacancy. However with such an abundance of applications and a minefield of unsuitable candidates to negotiate, every next step could prove to be the costliest yet.

With the temptation all too great to hire the first applicant who demonstrates the ability to knot a tie, businesses are warned to approach their recruitment process with caution as the financial and production implications are seemingly greater than expected.

The numbers

At risk of sounding stereotypical, it's our intellectual betters from Oxford who have managed to bring to light the financial cost of a bad employee hire. The report by Oxford Economics has suggested that replacing staff could cost a staggering £30K with the majority of this incurred via lost output as a new employee gets up to speed with the job. They deduced that on average, it takes someone around 6-7 months to fully settle into a new role at a productivity cost of £25K per employee.

The remaining cost of replacing staff is of a logistical nature with advertising, time spent interviewing candidates and agency rates all stacking up. Add the hiring of temporary workers and the loss of time for your HR staff and you've acquired a further £5K bill.

Few companies have £30K just lying around and losing it to poor judgement is regrettable. Incidentally, for that price you could hire Wayne Rooney for a day.up until about lunchtime.


Life isn't all about money, and often it's the people on the floor who are the most affected by a bad recruitment decision. Whether they express it or not, picking up the slack for an unsuitable member of staff will soon gripe on your already exemplary (mostly) employees and this can impact upon office morale. You'll be surprised how quickly a newbie can become the source of resentment and frustration if they're being carried by colleagues but still receiving the plaudits.


Regardless of your industry, you can't underestimate the effect a poor employee can have on your company's reputation. How often have you been to a restaurant and not returned because of the poor service? Well this transcends across all areas of work and whether it be through a bad attitude or lack of knowledge, a tarnished reputation is difficult to repair. Your business is only as good as its worst employee, so it's important to remember that whoever you hire, they will in someway be representing you and your brand.

With ever growing demands on the business world, it's no longer a case of just 'finding a place' for a struggling employee with new hires expected to hit the ground running and be prepared to work across various roles. Around 62% of UK employers report being the victims of a bad hire in the last year and this highlights a combination of ineffective recruitment methods and an ever widening skill gap that results in a compromise on the 'perfect' candidate.

Landing the next Jordan Belfort or Frank Abagnale isn't always possible, but appreciating the always developing nature of recruitment will give you the best chance of hiring the right people for the job. Recruitment agencies try and eliminate the risk of a bad hire by gaining an understanding of you and your business before supplying candidates that they feel will fit seemingly into your organisation. While this may take all the fun away from the 'aura reading' Mystic Meg employers out there, it could just put 15K lottery tickets in your back pocket.